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What redundancy pay is
Redundancy pay is a legal payment that some employees are entitled to when their job is no longer needed. It is separate from notice pay and any other contractual payments you may receive.
In the UK, you usually qualify if you are an employee with at least two years’ continuous service. The amount you get depends mainly on your age, how long you have worked for the employer, and your weekly pay.
How statutory redundancy pay is calculated
Statutory redundancy pay is based on a set formula. For each full year you worked, you get:
1.5 weeks’ pay for each full year you were 41 or older, 1 week’s pay for each full year you were 22 to 40, and half a week’s pay for each full year you were under 22.
Only a maximum of 20 years’ service is counted. There is also a limit on weekly pay, which is set by the government and can change each year.
What counts as a week’s pay
A week’s pay is usually your normal gross weekly pay before tax and National Insurance. If your pay varies, such as in shift work or commission-based roles, the calculation may use an average over a set period.
For some employees, bonuses, overtime and allowances may not be included unless they are contractually guaranteed. This is why two employees with the same length of service may receive different redundancy amounts.
Notice pay and redundancy pay are different
Notice pay is the pay you receive for the notice period your employer must give you before your employment ends. Redundancy pay is the separate compensation for losing your job.
You are usually entitled to both, unless your contract provides for a different arrangement that still meets legal minimum rights. If your employer makes you leave immediately, they may need to pay you in lieu of notice instead.
Other payments you may receive
Alongside redundancy pay and notice pay, you may also be owed holiday pay for untaken leave. If your contract includes bonuses, commission or enhanced redundancy terms, these may also apply.
It is worth checking your contract, payslips and any staff handbook carefully. Employers sometimes offer more than the statutory minimum, especially during voluntary redundancy schemes.
Getting the right amount
If you think your redundancy pay is wrong, ask your employer for a written breakdown of the calculation. That should show your service length, weekly pay used and any deductions or limits applied.
If the issue is not resolved, you may be able to get help from Acas or make a claim to an employment tribunal. Getting advice early can help protect your rights and make sure you receive everything you are owed.
Frequently Asked Questions
Redundancy pay calculation notice entitlement UK refers to the legal rules in the UK that determine how statutory redundancy pay is calculated and what notice an employee is entitled to when their job is being made redundant.
Eligibility for redundancy pay calculation notice entitlement UK usually depends on being an employee with at least 2 years of continuous service, unless an employer offers a more generous contractual scheme.
Redundancy pay calculation notice entitlement UK is calculated mainly from age, length of continuous service, and weekly pay, subject to the statutory weekly pay cap and the legal maximum service years used in the calculation.
Under redundancy pay calculation notice entitlement UK, the minimum notice period depends on length of service, ranging from at least 1 week to 12 weeks, unless the employment contract provides longer notice.
Redundancy pay calculation notice entitlement UK can include notice pay if the employer does not require the employee to work their notice or does not provide pay in lieu of notice where allowed.
Redundancy pay calculation notice entitlement UK is generally tax free up to certain limits, but notice pay and any money treated as wages are usually subject to tax and National Insurance.
Yes, redundancy pay calculation notice entitlement UK can be higher if the employment contract, staff handbook, or a settlement agreement provides enhanced redundancy terms.
Age affects redundancy pay calculation notice entitlement UK because different multipliers apply depending on whether the employee was under 22, aged 22 to 40, or aged 41 and over during each year of service.
Length of service affects redundancy pay calculation notice entitlement UK because statutory redundancy pay is based on completed years of service up to the legal limit, and notice entitlement also increases with service length.
Redundancy pay calculation notice entitlement UK uses a statutory cap on a week's pay for redundancy calculations, and the amount can change each year based on government-set limits.
If redundancy pay calculation notice entitlement UK is not paid, an employee may be able to raise the issue with the employer, file a claim with an employment tribunal, or seek advice from ACAS or a solicitor.
Redundancy pay calculation notice entitlement UK usually does not apply if the employee has less than 2 years of continuous service, which is common for people still on probation.
Redundancy pay calculation notice entitlement UK can still apply during maternity leave if the employee is made redundant, and additional protections may apply to suitable alternative vacancies and dismissal fairness.
Yes, redundancy pay calculation notice entitlement UK applies to part-time workers in the same way as full-time workers, although the calculation of pay will reflect their normal working pattern and earnings.
Redundancy pay calculation notice entitlement UK can apply to fixed-term contract workers if the role ends because the job no longer exists and they meet the service requirement for statutory redundancy pay.
Redundancy pay calculation notice entitlement UK deals with payment and notice when a job disappears, while unfair dismissal concerns whether the employer followed a fair process and had a valid reason for dismissal.
Redundancy pay calculation notice entitlement UK is not usually reduced by garden leave, because the employee is still employed and should normally receive notice pay and other contractual benefits during the notice period.
You should check your contract for enhanced redundancy terms, notice periods, pay in lieu clauses, bonuses, holiday pay rules, and any terms that improve on the statutory redundancy pay calculation notice entitlement UK.
Holiday pay is separate from redundancy pay calculation notice entitlement UK, but any accrued untaken holiday should usually be paid when employment ends, in addition to redundancy and notice-related sums.
Official guidance on redundancy pay calculation notice entitlement UK is available from GOV.UK and ACAS, which explain statutory redundancy pay, notice periods, and employee rights in the UK.
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